Is CryptoCurrency Dying in 2022? The year 2021 has been the most important in the history of the cryptocurrency industry. That is not simply because token prices increased by hundreds of percentage points, demonstrating that massive crypto returns are still possible. More importantly, this year’s crypto boom was fueled by widespread adoption, integration, and innovation, such as El Salvador’s bitcoin regulation and prominent businesses and celebrities’ support of NFTs.
So, what happens after the most historic year in history? Probably not as huge as last year.
This year was special because the day-trading frenzy that erupted during the 2020 COVID lockdowns was translated into meaningful adoption and innovation by companies like Twitter. And crypto is cyclical in nature, with new converts becoming overextended and burned, then retreating to lick their wounds and learn before diving back in. However, 2021 has already defied crypto’s previously predictable boom-and-bust cycle, so anything is conceivable.
Even if it is not as exciting as 2021, 2022 will see significant changes, including the debut of Ethereum 2.0 (finally!) and the end of NFT-mania (maybe!). And, as the industry matures, there will be plenty of funds to fund the continued development of innovative initiatives, as well as plenty of possibilities to participate if you pay attention. Crypto will also be influenced by key real-world issues, such as US interest rates, inflation, and COVID variants — some of which are more predictable than others.
What follows is a mix of my personal perceptions of what is to come, as well as the (usually far superior) perspectives of other crypto experts. None of it is financial advice, and the majority of it is almost certainly incorrect – but I hope it will aid you in forming your own picture of the road ahead. What follows is a mix of my personal perceptions of what is to come, as well as the (usually far superior) perspectives of other crypto experts. None of it is financial advice, and the majority of it is almost certainly incorrect – but I hope it will aid you in forming your own picture of the road ahead.
Here are some of the predictions, Is CryptoCurrency Dying in 2022?
The token market as a whole is flattening out.
At the very least, expect a period of unpredictably volatile and largely flat token markets. In strictly technical terms, I am increasingly persuaded we will not experience a large downturn as we saw in 2018, but 2021 was such a huge year that a reversion to the norm is likely. I believe bitcoin has a decent chance of setting a new all-time high above $69,000 by the end of 2022, though I would not bank on it lasting until 2023.
To be fair, I was considered too negative the last time around – I predicted a top at roughly $30,000 in 2020, but it turned out to be substantially more than a cycle. It is possible that momentum will build up again, so take this forecast with a grain of salt.
Elon Musk will continue to confuse and mystify newcomers to cryptocurrency.
Elon will claim to be Satoshi despite not “getting” proof-of-work by the end of 2022, once he realizes it is not Nick Szabo (PoW). Craig Wright will sue him for defamation, resulting in much hilarity.
NFTs continue to skyrocket.
Many once high-dollar non-fungible tokens are already bleeding, and many of those prices were likely produced through wash trading in the first place, so they still have room to fall. Since a lot of their price activity over the last 18 months has been based on the misperception that they are “art” and will trade like a Basquiat or Van Gogh, I envision the market for “profile pic” and celebrity-branded NFTs, in particular, coming crashing down.
They are not and will not be. Review my essays on the art market and generative art for more insight into what makes true art valuable, whether as an NFT or in other forms.
Few remember but the NFT project cycle was first experienced by the TopShot market:— Sergito // TheMadPups (@sergitosergito) December 25, 2021
1. Early adopter lull
2. Explosive growth via speculative demand
3. Increased supply to feed them ducks
4. Back to reality, whoops there goes gravity
5. On to the next one pic.twitter.com/KexvawLIgw
Here’s Comes ETH2
The shift to proof-of-stake (PoS) that has been planned for years will eventually take place next year when the new PoS Beacon Chain joins with the current PoW chain. That entails some risk, and the biggest benefits of the change may not emerge until 2023 when the new Ethereum introduces sharding.
The most important point to remember is that, at least until sharding is achieved, the PoS switch will have no impact on Ethereum transaction fees. The popularity of another layer 1 blockchains like Avalanche has been mostly due to high fees over the last year or two, so the Ethereum upgrade should not really interrupt that momentum (see below). (Please note that the ETHDenver conference in Denver will be held in February.)
The diversity at layer 1 is real.
The fragmentation of user enthusiasm for actual, significant applications across a variety of blockchains is one of the most legitimately encouraging things I have observed this year. In the NFT sector, for example, we have seen significant adoption of Solana, Tezos, and other blockchains.
However, as the Bankless team outlined in its “5 Things, We Got Right” episode, there are strong reasons to believe that, in the long run, two or three dominating smart contract chains will be more likely than, say, five or six. The number of platforms people utilize will grow in the coming year, but this will be followed by true rivalry and, finally, re-consolidation.
Token Decoupling continues
The term “decoupling” refers to the fact that other crypto assets will no longer simply track the price of bitcoin. Rather, each will see profits based on its own unique value offer. Decoupling has been taking place steadily for years, but it really picked up speed in 2021.
The disparity between the highest and lowest crypto returns was striking: layer 1 tokens such as Solana (SOL) and terra (LUNA) returned 8,000 percent or more, while aged or defective projects such as EOS and internet computer dropped by more than 80%. The lesson is clear: being “in crypto” is no longer enough. Where you place your money, as with any investment, is critical.
This year’s version of Messari’s crypto theses, an annual must-read and an excellent way to catch up on cryptography, has more on decoupling.
The storey of Bitcoin’s inflation is put to the test.
As I recently wrote, bitcoin did not respond to rising inflation as it should have, according to many enthusiasts’ “inflation hedge” notion. As I previously stated, this is due to the fact that adoption has yet to reach a point where the underlying pricing is steady enough. However, if inflation persists or accelerates, even if only for the first half of the year, bitcoin will need to show a market response in the medium term for the narrative to be credible.
Bitcoin Price Prediction amid Crypto Crash
The figure on everyone’s mind for BTC for much of 2021 was $100,000 (£74,116). Supporters observed how it rose from $34,000 (£25,218.31) to $67,566.83 (£50,115.33) in a year of compounded increases and believed it could go even higher.
Despite the fact that it could not quite make it, many investors have raised their expectations for 2022, hoping to build on a 60% return with another strong year. Central bankers, on the other hand, may moderate those positive expectations, since they will most likely wish to avoid competition that may drain value from fiat currencies through law.
Meme coins are completely gone.
Meme coins are essentially a casino, but they benefit from positive feedback loops since winners generate a lot of public interest, which keeps the winnings coming in. A downward or sideways cycle, on the other hand, can be quite painful. In 2022, crypto entrants will exhibit less ape-like behavior and consolidation around intelligent investment. That means coins like doge, which peaked in May, will continue to lose momentum, and new pumps will have limited upside.
(An interesting exception is the Shiba Inu, which could serve as an example of how to turn a meme into a real endeavor.) Its ShibaSwap DEX appears to be fascinating on the surface, however, I can not say whether it will elevate the project above meme coin level even if it succeeds.)
Bitcoin is being adopted by more countries.
Other countries, mainly in South America, were said to be mulling similar actions shortly after El Salvador revealed its new bitcoin policy. The Bank of England, which was given the go-ahead on Dec. 21 to essentially confiscate roughly $2 billion of Venezuela’s gold holdings, has just given them a big nudge. Instead, it may send over the gold to Juan Guaido, a Venezuelan “opposition leader” who is well-liked by Western intelligence services.
This sends a strong warning to any country that defies neoliberal hegemony: Not your bank, not your gold. Bitcoin offers a compelling counter-proposal to that threat.
The pandemic “comes to an end.”
Bill Gates predicted that the COVID-19 outbreak would be effectively ended next year in his year-end blog post. While Gates emphasizes vaccines, it appears that the hyper-infectious Omicron strain will end the epidemic by infecting nearly everyone who has not been vaccinated (and killing a substantial number of them).
Ethereum Price Prediction Amid Crypto Currency Crash
ETH had a good year in 2021 as well, with fewer sharp drops. ETH started the year at $1,100 (£815.89) per coin, despite its current value of $3,822.15 (£2,833.72) per coin.
Analysts predict that momentum will continue into a bull market in 2022, with prices reaching $6,000 (£4,450.29) by the end of the year.
Investors have pinned their hopes on its adaptability, with Mark Cuban believing that an “infinite number of applications” based on the blockchain might “forever” change the consumer world.
Dogecoin Price Prediction Amid Crypto Currency Crash
DOGE made a surprise appearance in 2021 as a noteworthy altcoin, rising from $0.0099 (£0.0073) to $0.1709 (£0.13). That rally was nearly unrivaled in the market, but its current price is a significant drop from its peak in 2021.
DOGE topped the altcoin charts in May, with a price of $0.68 (£0.50), before plummeting. Since then, it has struggled to re-enter the upward trend, prompting analysts to estimate $0.30 (£0.22) by the end of 2022.